pork, sixty pounds of beef, which would go a considerable way towards the support of a single woman. Now she can at most demand but seventeen shillings and three pence new tenor, which is about one-eighth her original three pounds, and be sure won't purchase more than one half or one quarter of the above necessaries of life; and this she must take up with, because there is no remedy in law for her."

$95. A Project Revived.

It was at this juncture (1739) that the remnant of that party whose zeal and resentment had only been increased by the apparent success of their opponents in 1714 and 1716, again came forward with their favorite scheme of a private company empowered to issue bills of credit secured by pledges of real estate. To Thomas Hutchinson belongs the credit of first presenting to the people of the province the policy which, as the successor of the miserable expedient of inflation so long persisted in, was destined at no distant day to vindicate itself as the true policy for a state involved in extraordinary financial embarrassment. Hutchinson, as he had done on the former occasions, again urged the withdrawal of all the bills in circulation, proposing to borrow in England, upon interest, and to import into the province a sum in silver sufficient to redeem them from their possessors and so to furnish the inhabitants with a stable medium sufficient in quantity to meet all the demands of trade, while the equal distribution of its repayment over a long period of years would render the burden of consequent taxation tolerable. But the proximity of the year 1741, which, as the limit beyond which the royal instructions had prohibited the postponement of the payment of the bills of credit, had been burdened with taxes amounting to nearly thirty thousand pounds sterling, or ninety thousand pounds in paper, counter-balanced any sentiment which the unhappy experience of the people during the

1 Quoted by Minot, History, I., p. 85.

last twenty-five years may have created in favor of hard money, and the proposition was rejected with something approaching unanimity; since the absence of instructions against the emission of bills of credit by private companies, left the way open for the continuance of the practice of inflation under conditions which were believed to promise results less disastrous than those which had been entailed by unlimited government issues.

$96. The Land Bank Party.

Hutchinson says that the "notable company" of eight or nine hundred persons at the head of which the projector of the land bank proposed in 1714 now placed himself, and which was to give credit to one hundred and fifty thousand pounds sterling of lawful money to be issued in bills, while it included some few of rank and good estate, was mainly composed of plebeians, persons of low condition and small estate, many of them, perhaps, insolvent. Each member was to pledge real estate in proportion to the sums he subscribed for and took out, or, if he possessed no real estate, to give a bond with two sureties, no personal security of more than one hundred pounds to be taken from one person. Every subscriber was to pay three per cent. interest on the sum withdrawn, and one-fifth of the principal yearly. There were to be ten directors and a treasurer, chosen annually. Payments of principal and interest might be made in bills, or in products and manufactures of the province, "or Logwood, though from New Spain," at such rates as the directors might set from time to time-a feature no doubt suggested by the colonial practice of receiving taxes in " country pay," and which gave to the new project the popular name of the "manufactory scheme." Such was the project urged before the general court in 1740, on the plea that, by the furnishing in this way of a medium and instrument of trade, not only would the inhabitants in general be better able to procure province bills

for the payment of taxes; but foreign and inland trade would be quickened and invigorated. Even in 1714 the number of those in favor of a private land bank had been so large that they were defeated only by the amalgamation of the hard money party with the public bank party; and it had ever since been steadily increasing. Beside the eight hundred subscribers to the bank now proposed, the needy portion of the province in general were favorable to the scheme. Indeed, it was soon clear that the great majority of the house of representatives were either subscribers or friends of the project, and it has ever since been known as the "land bank house.” The company was incorporated, and although, as Hutchinson tells us, "men of estates and the principal merchants of the province abhorred the project and refused to take the bills" of the company, an agreement among the merchants to issue for circulation their own notes redeemable in silver or gold at distant periods, much like the scheme of 1733, was attended with no better results than that had been; for "great numbers of shopkeepers, who had long lived on the fraud of a depreciating currency, and many small traders gave the bills credit."

$97. Land Bank Troubles.

The dangers inherent in such a concern now began to be manifest. "The directors-it was said by vote of the company-became traders, and issued what bills they thought proper, without any funds or security for their repayment. They purchased every sort of commodity, however much of a drug it might be, for the sake of putting off bills; and by one means or another a large sum, perhaps fifty thousand pounds sterling or sixty thousand pounds sterling, was soon in circulation." What was to be done? The well-meant

1 Minot, History, I., says, "for the ostensible purpose of supplying a currency when the bills of credit issued by the government should be absorbed."

2 Minot, I., says, "payable on demand in silver, or bills of credit equivalent, according to the current rate."

9 Hutchinson, History of Masachsusetts II.

efforts of Governor Belcher to blast the bank' probably approached too near to an illegitimate exercise of authority to make very much head against a project with which perhaps a majority of the inhabitants of the province were in open or secret sympathy. A last resort remained in an appeal to parliament, whose power to control all public and private persons and proceedings in the colonies, our loyalist historian' cannot refrain from reminding us, no one then ventured to dispute. Here sounder financial views obtained; and the efforts of an agent to convince the committee that the course of the directors was justifiable, failed completely.

$98. The Land Bank Doomed.

The declaration of parliament that the act of 6 George I., Chapter 18, prohibiting the emission of bills of credit by private corporations in England, did, does and shall extend to her colonies and plantations in America, fell like a thunderbolt upon the bank. Nor was this all. Not only was the bank dissolved by the act, but the holders of its bills were given the right of action against every director or partner for the recovery of the sums expressed on their face, together with interest. In the despair of the moment, some of the partners were for defying the law and continuing the issue of bills; but calmer counsels prevailed, and the directors, realizing the paralyzed condition of the company, for once adopted the wisest course in throwing themselves upon the mercy of the general court. The business of winding up the disordered affairs of this unfortunate institution hung like a millstone about the neck of the court for many years, it being impossi

1 "Not only such civil and military officers as were directors or partners, but all who received or paid the bills, were dismissed. The governor negatived the person chosen speaker of the house because he was a director of the bank, and afterward negatived thirteen newly elected councilors who were directors or partners, or reputed to favor the scheme."-Hutchinson, II. See also Belcher's speech, November 22nd, 1740, and January 9th, 1741.

2 Hutchinson, II.

ble, from the nature of the case, even in the end to do more than mete out conventional justice in a rough and unsatisfactory way to the legal representatives of those individuals who had been defrauded by the insidious dishonesty of the directors. We are not concerned now with the question of the constitutionality of these clauses in the above mentioned act, which gave to an enactment of twenty years before a meaning and intent from the date of its passage differing from those presumed to have existed in the minds of its originators, and which, by making these partners of the company severally liable for the redemption of all the bills issued since the incorporation of the company, created between the partners and the holders of the company's bills a relationship differing from that claimed to have been established by the instrument of incorporation. What is sufficiently plain is that the sound financier must strongly commend the action of parliament in refusing to be influenced by those arguments always advanced by the makers of bills that depreciate-especially by that time-worn and specious argument of the injustice of protecting mere speculators at the expense of those who have felt obliged to part with the bills at a discount-to make the amount of liability less than the face of the bills. If our state and national financiers, when called upon to deal with similar problems half a century later, had followed the example here set, they would have enjoyed a higher reputation to-day for honesty and sagacity. As between the two methods of inflation which had now been successively tried in Massachusetts, our choice must be decidedly for the former; for if that scheme was objectionable in that it hampered the government with some of the most perplexing questions of banking, the latter was still more so in that it endowed a banking company with some of the most important functions of government.

$99. Inherent Evils.

Not the least of the evils inherent in an irredeemable cur